Avalanche’s native token, AVAX, is a high-performing utility token. This means that it serves as a form of payment within the system. Avalanche uses the AVAX token as incentives, transaction fees, and for a variety of other purposes. Furthermore, AVAX is also used for staking within the Avalanche ecosystem.
Avalanche is undoubtedly one of the most competitive blockchain platforms. Different projects often launch with new use cases, fueling Avalanche’s growth. Since the year began, Benqi Finance has been one of the top-performing platforms and currently ranks third in terms of its TVL. Furthermore, Benqi provides Avalanche users with a one-of-a-kind lending and borrowing service, which sAVAX is an important part of it.
What is sAVAX?
Before delving into what sAVAX is all about, let’s understand the concept of liquid staking. Avalanche is a Proof-of-Stake network that pays users a preset amount for staking their assets to keep the system secure. However, there are some complications with this since PoS and DeFi were not designed to work together in the first place. Staking AVAX on validator nodes bonds the user’s tokens to the nodes, locking them up for a fixed duration.
Liquid staking offers users the chance to unlock their staked assets and use them on decentralized platforms. As a result, users can earn passive income on their staking rewards. Furthermore, users can also use their staked assets on DeFi apps to control risk or earn more income, depending on what they want.
Liquid staking is live. https://t.co/7ltUAvEXHn
— Emin Gün Sirer🔺 (@el33th4xor) February 16, 2022
So, sAVAX is an interest-bearing version of the AVAX token. Users will receive the sAVAX token once they stake their AVAX tokens. As a result, users will receive incentives for safeguarding Avalanche and for their role in the DeFi space. Therefore, Benqi gives users who provide liquidity to its protocol the sAVAX token as a receipt. Also, Benqi offers a 7% APR for users who stake on its platform. So, users can take their staked AVAX and earn from other platforms.
Where to Earn Yield on sAVAX
A good way to earn yields as an sAVAX holder is to participate in farming on DeFi protocols. Therefore, here are three ways where you can use your sAVAX:
1. Trader Joe:
Trader Joe is one of the top decentralized exchanges running on Avalanche. The exchange currently ranks second on Avalanche in terms of its TVL. Also, Trader Joe provides strong yields for sAVAX holders, offering yields of 8.04% for AVAX-sAVAX farming with no impermanent loss. Users can utilize their interest-bearing sAVAX on the AVAX-sAVAX farm to earn yields.
Seems like everyone is thirsty for #AVAX …
• Over $80m in the Liquid Staking AVAX Farm
• Farm: $sAVAX / $AVAX = earn $JOE + $QIAbout $sAVAX
• $sAVAX is an interesting bearing token (like xJOE)
• Stake AVAX for sAVAX on @BenqiFinance
• Or swap it on @traderjoe_xyz ! pic.twitter.com/vXfsslnwzt— Trader Joe🔺 (@traderjoe_xyz) February 18, 2022
Moreover, Trader Joe specializes in swapping and trading. Other essential DeFi features such as staking, yield farming, and lending are also included in this project. Also, the exchange has several unique features that make it a good spot for farming and earning yields. For example, it combines DEX and Lending & Leveraged Trading. It increases liquidity and attracts funding.
Pangolin
Pangolin is a community-driven, decentralized exchange on Avalanche. It has a total liquidity of $276 million. On Pangolin. You can either add sAVAX liquidity in a pool or farm sAVAX. Also, Pangolin provides strong yields for sAVAX holders, offering a yield of up to 9% for AVAX-sAVAX farming with no impermanent loss. Generally, Pangolin is a good destination for people seeking to earn a passive income in DeFi.
🔥🔥 wow! sAVAX-AVAX LPs have facilitated 24H vol of more than Trader Joe & Pangolin combined 👀 With our Amplification we generate high volume because we give the best rates for #DeFi traders 🤩 Even better? Use 1 token to add liquidity, less effort, more returns! #AVAX pic.twitter.com/wsuNpGYMaB
— Kyber Network (@KyberNetwork) March 17, 2022
Anchor Protocol
Another approach to earning yields is to use it as collateral to get a loan and stake the borrowed asset. With the recent collaboration between Benqi and Anchor Protocol, sAXAX has a huge chance to earn yields. Also, Anchor users can now deposit sAvax as collateral and borrow UST. They can also deposit the UST to earn a yield of 20%.
5/ Click “Provide” next to the sAVAX collateral option, input your sAVAX borrow amount. Once complete, click the borrow button and set a safe borrow utilization of 75% or less.@wormholecrypto $UST corresponding to the borrowed amount will be deposited into your wallet. pic.twitter.com/aDKUK9m3wA
— Anchor Protocol (@anchor_protocol) March 23, 2022
The Anchor-Benqi collaboration offers the sAVAX token unseen utility and flexibility. Users now have multiple options regarding what to do with their staked tokens.
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